Komanoff: The Time Has Never Been More Right for a Carbon Tax (U.S. News)
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Komanoff asks: If efficiency hasn’t cut energy use, then what? (Grist)
Komanoff: Senate Bill Death = Win for Climate (The Nation)
Q&A: Charles Komanoff (Mother Jones)
This post was updated, and its headline slightly altered, on July 13, 2021.
A bill introduced in June by Senators Sheldon Whitehouse (D-RI) and Brian Schatz (D-HI) envisions a hefty price on U.S. carbon dioxide emissions from all sources along with pollution charges on the three primary “criteria” air pollutants — particulates, sulfur dioxide and nitrogen oxides — from large stationary sources near environmental justice communities.
The Save Our Future Act (101-page downloadable pdf) prices CO2 emissions at $54 per metric ton, equivalent to $49 per U.S. (short) ton, starting in 2023, with the price rising each year by a percent equal to 6 percentage points on top of the rate of general inflation.
The bill also proposes to charge emissions of fine particulates, nitrogen oxides and sulfur dioxide from qualified “major sources” (a legal term defined at 42 U.S.C. 7661) located within a mile of any environmental justice community (see definition and discussion further below). In addition, a border adjustment mechanism would prevent carbon leakage and ensure fairness for U.S. manufacturers, according to a press release from Sen. Whitehouse’s office, while an “environmental integrity mechanism” would raise the charges on CO2 and other greenhouse gases if needed to keep shrinking emissions fast enough to meet a 2050 net zero target.
Pushing the Envelope
The Whitehouse-Schatz bill pushes the envelope of carbon tax legislation. The starting price of $49/ton — pegged to OMB’s conservative estimate of the social cost of carbon — represents a new high. So does the annual increase rate of general inflation plus 6%. Both figures surpass the Climate Leadership Council’s long-standing proposal to start pricing CO2 at $40/ton and raise that price 5% faster than annual inflation (to be fair, the council’s 2017 price base translates to $45/ton or more in 2023, the Whitehouse-Schatz bill’s start year).
The Save Our Future Act is co-sponsored by Senators Martin Heinrich (D-NM), Kirsten Gillibrand (D-NY), Jack Reed (D-RI), Chris Murphy (D-CT), and Dianne Feinstein (D-CA). The Whitehouse press release says the bill is supported by the Utility Workers Union of America, the New York City Environmental Justice Alliance, New York Lawyers for the Public Interest, The Nature Conservancy, Environmental Defense Fund, National Wildlife Federation, American Sustainable Business Council, Citizens Climate Lobby, Clean Air Task Force, and the World Resources Institute, although sources have reported that neither of the New York groups have formally endorsed it.
We ran the CO2 price in the Save Our Future Act through CTC’s carbon tax model (which you may download via this link). The results, shown above, indicate that the bill won’t fulfill its stated objective to cut carbon emissions in half within a decade, though, to be fair, our modeling doesn’t reflect additional impacts from the prices on the three localized pollutants. Nor does our model capture the likely low-hanging fruit of curbing emissions of methane and other greenhouse gases.
Still, the price-compounding built into the bill limits its efficacy somewhat; even the unprecedented proposal to raise the rate 6% faster than inflation doesn’t boost the price nearly as fast as a straight-up $10/ton annual increment. (Simple math suggests that, with 2% annual inflation, the price won’t spin off annual increments of $10/ton or more until it has reached $125/ton.)
How carbon revenues are used has become central to carbon taxing’s equity and politics. The following four bullet points, taken from the Whitehouse press release, summarize the Save Our Future Act’s proposed treatment:
- Environmental justice communities: The bill would invest roughly $255 billion over 10 years in existing energy affordability, pollution reduction, business development, career training, and tribal assistance programs.
- Fossil fuel workers and communities: The bill would invest roughly $120 billion over 10 years in economic development, infrastructure, environmental remediation, assistance to local and tribal governments, and wage replacement, health, retirement, and educational benefits for coal industry workers who lose their jobs.
- Assistance to states: The bill would fund $10 billion in annual block grants to states and tribes to defray expenses associated with climate change.
- Checks to low- and middle-income families: Consistent with the means testing thresholds established for pandemic relief checks in the American Rescue Plan, every eligible adult would receive $800/year and every eligible dependent $300/year, distributed in biennial installments.
Provisions #1 through #3 together would absorb around $500 billion over the law’s first decade, out of the total $4 trillion in revenue that CTC’s model indicates the Save Our Future Act will generate during that time. The difference between those figures — some $3.5 trillion total — pays for the dividend checks noted in provision #4.
The proposed allocation of the vast majority of revenues to the dividends presumably is what delivered support from Citizens Climate Lobby, the national grassroots organization that for the past decade has relentlessly pursued the idea of returning carbon-tax revenues as dividends to U.S. households. Provisions 1 through 3 clearly are designed to win backing for the bill from justice-oriented climate advocates.
Local Air Pollutants
Environmental justice is also evident in the bill’s novel proposal to charge for emissions of fine particulates ($38.90/lb), NOx ($6.30/lb) and SO2 ($18/lb), with those prices rising at the rate of inflation, from qualified “major sources” (a legal term defined at 42 U.S.C. 7661) located in or no more than a mile from an environmental justice community. Our preliminary calculations suggest that all fossil-fuel power stations 25 megawatts or larger, even those with modern combined-cycle technology burning methane gas, would meet the statutory criteria, provided they are sited directly proximate to a community of color.
Other large stationary polluters such as oil refineries, chemical plants and perhaps oil and gas extraction and processing facilities might also qualify. (We are awaiting details from Sen. Whitehouse’s office.) We estimate that coal-fired power plants would be charged for their “local” pollutants at a rate averaging around 5 cents per kWh generated, a fee that would effectively duplicate (i.e., double) the direct impact of the initial $49/ton carbon tax. Gas-fired power generators, in contrast, would pay only around 2/10 of a cent per kWh, on account of their sharply lower emission rates for conventional pollutants, relative to coal. (You can see our assumptions and calculations in the Local Pollutants tab of our carbon-tax model.)
Prospects aren’t bright for the Save Our Future Act in the current Congress. The persistence of the Senate filibuster means that 60 out of 100 senators must approve the bill; yet opposition is virtually guaranteed from almost all 50 Republican senators along with Sen. Joe Manchin (D-WV) and perhaps a few other Democratic senators. Not only that, the Biden White House is unlikely to put its muscle behind the bill, for reasons we laid out earlier this year in our post, Playing the Long Game for Carbon Fee-and-Dividend:
Razor-thin House and Senate margins simply don’t allow for hot-button measures like carbon pricing that might jeopardize other elements of the package in addition to failing on their own. Biden’s task, as he knows full well, is to pass bold, progressive, popular legislation to help Democrats expand their Congressional majorities in 2022 and 2024 and give him a thumping second-term mandate to boot. Then, and only then, can he risk a carbon tax.
Still, let’s credit the Save Our Future Act for pushing the envelope on carbon taxing on the twin key fronts of tax design and revenue treatment. Kudos to Senators Whitehouse and Schatz for seeking support from a diverse set of environmental and justice campaigners. The bill underscores the importance of solidifying a pro-climate Congress to enable such forward-thinking bills to be seriously considered during the second half of the Biden term.
We’ve just posted an update — the first in four years — to our carbon-tax spreadsheet model, CTC’s easy-to-use but powerful tool for forecasting future emissions and revenues from possible U.S. carbon taxes.
The model, which runs in Excel, accepts any carbon tax trajectory and spits out estimated sector-by-sector and economy-wide emission reductions, year by year.
The big new feature is explicit modeling of transportation’s conversion to electric propulsion. The model establishes baseline projections of electric power’s 2050 shares of car travel (60 percent), freight hauling (30 percent), and airplane seat miles (10 percent, probably by hydrogen, which, like battery power, will be produced by electricity); it then elevates these percentages in the case of robust carbon-taxing.
Our updated model also includes, as it must, the added electricity to power electric transport. This quantity is substantial, accounting for around 20 percent of all electricity usage by the 2045 end of the forecast period. Yet the resulting emissions never reach 100 million metric tons of CO2, on account of the rapid decarbonization of electricity production predicted in the model. (For comparison, note that total U.S. carbon dioxide emissions this year from burning fossil fuels are likely to be between 5,000 and 5,500 million metric tons.)
Without a tax on carbon emissions, however, electrified transport will add 200 million metric tons to annual U.S. emissions two decades from now — even though fewer cars, trucks and planes will be electric-powered, due to the absence of a carbon price signal. The higher level is because of the slower pace of decarbonization of electricity generation without a carbon tax.
A Carbon Tax Could Put Biden’s Ambitious 2030 Target Within Reach
At last month’s Earth Day climate summit, President Biden committed the United States to “a 50-52 percent reduction from 2005 levels in economy-wide net greenhouse gas pollution in 2030.” Since his target encompasses greenhouse gas pollutants like methane and chlorofluorocarbons and also appears to take credit for carbon sequestration in soils and forests, it’s possible that it assumes only a 40 percent reduction in fossil fuels’ CO2 along with very aggressive reductions in other areas.
A robust carbon tax could put a 40 percent CO2 reduction target nearly in reach. Our modeling suggests that with a carbon tax starting next year at $15 per ton of CO2 and rising by $10 a ton each year, U.S. 2030 carbon emissions from burning fossil fuels would be 36 percent less than in 2005. Without a carbon tax, the 2030 vs. 2005 reduction is limited to 14 percent — the same as in 2017. And while Biden’s laudable plans to ramp up energy efficiency and renewable electricity will cut emissions somewhat, raising the reduction figure to 20 percent is probably the limit to what the U.S. can accomplish by 2030 without a rapidly rising carbon tax.
How We Model Electrified Transport
Vehicle electrification is beginning to take off, propelled by improving battery performance, zero-emission-vehicle mandates in some states, and Biden administration plans to jump-start battery charging facilities across the country.
Like other innovative mass-market technologies — smartphones, VCR’s and microwave ovens come readily to mind — dissemination of EV’s is likely to follow an s-curve rather than a linear (straight) path. We use such a curve to represent the rate of uptake, with the halfway point assumed to be 2035.
As noted, we posit that even without a significant carbon price, electric or hydrogen propulsion will account for 60 percent of U.S. driving, 30 percent of goods movement and 10 percent of aviation by 2050. But a robust carbon tax will speed the transition, not just by widening electric vehicles’ per-mile price advantage over gasoline, diesel and jet fuels but by creating tipping points, e.g., accelerating the replacement of gas stations with charging stations. We assume that a robust price — $100 or higher (in 2020 dollars) by 2031 — will lift our 60/30/10 percentages by half, to 90/45/15.
The reductions in U.S. petroleum requirements predicted for that scenario by our model are striking. By the mid-2030s, when the penetration of electric transport is at its halfway point and kicking in fast, total oil consumption is projected to be nearly four million barrels a day (25 percent) less than in a business-as-usual, no-carbon-tax future, and nearly eight million barrels a day less than the actual 2005 rate.
Other Features of CTC’s Carbon Tax Model
Here are other defining features of our carbon-tax model:
1. It’s baselined to 2019: That’s the most recent year with available data. It’s also a more solid baseline year than 2020, when the pandemic drove down key fossil fuel use sectors, especially driving and flying.
2. Oil refining is allocated to usage sectors: “Upstream” carbon emissions from refining petroleum products are assigned to the respective end-use sectors such as driving, goods movement and aviation. The model doesn’t ignore analogous add-ons for electric transportation; we add 20 percent to the current watt-hours per mile figures for the respective travel modes to allow for electric-intensive battery manufacture.
3. We smooth the uptake of the carbon tax: Big jumps in carbon tax levels won’t be fully reflected in fossil fuel use right away. Households and businesses need time to adapt to costlier fossil fuels. The model captures these lags through a ceiling in the tax increment that can be “absorbed” in any one year and carries over any excess. This feature is helpful for trajectories like the Whitehouse-Schatz bill, which kicks off with a bang at $45 per metric ton of CO2. Under our default setting, in which the economy in any year is assumed able to process only tax increments up to $15 per ton of CO2, the reductions from that initial $45/ton charge are spread over three years rather than, unrealistically, assigned to the first year.
4. Demand vs. supply impacts: The Summary page has a section comparing projected CO2 reductions from changes in fuels’ carbon intensities (“supply side”) versus reductions from reduced energy usage (“demand side,” e.g., lower electricity purchases, less driving or flying). Under our default carbon tax — starting at $15 per ton of carbon dioxide and rising annually at $10/ton — an estimated 64% of projected CO2 reductions are on the supply side (i.e., due to decarbonization); a substantial minority, 36%, come about through reduced demand, illustrating that subsidies-only policies miss out on huge CO2 reductions. Indeed, clean-energy subsidies undercut decarbonization by stimulating energy usage through lowered energy prices, a phenomenon we noted in our 2014 comments to the Senate Finance Committee.
5. Transparency: All model assumptions, formulas and algorithms are in plain sight. This includes our price-elasticity assumptions that translate higher fossil fuel prices into lower demand trajectories, as well as the income-elasticities that predict more driving, flying, electricity usage and so forth as incomes rise. To be sure, some hunting may be required; the model has nearly 25,000 equations, after all. But the stepwise procedures we use to calculate year-to-year changes in each sector’s activity level, fuel use and emissions are all annotated, a mighty assist to anyone wishing to get deep into the model’s workings.
6. Easy to use: For example, we just read today’s WaPo op-ed, Biden should embrace a carbon tax, by veteran Washington and Wall Street insiders Henry Paulson and Erskine Bowles. Once we got past the political tone-deafness of urging a carbon tax now (“Biden’s task is to pass bold, progressive, popular legislation to help Democrats expand their Congressional majorities in 2022 and 2024 and give him a thumping second-term mandate to boot,” we wrote last month; “then, and only then, can he risk a carbon tax”), we saw Paulson and Bowles’ claim that a carbon tax starting at $40 per ton and increasing by 5 percent per year above the rate of inflation “would reduce U.S. emissions to 50 percent below 2005 levels by 2035.” It took only seconds to plug those figures into our model and see that in year 15, which would be 2036 or later, the tax would reduce emissions by only 39 percent. While that’s a big reduction, it’s still a ways below the council’s claimed 50 percent.
The spreadsheet is user-friendly, powerful and, if you’re so inclined, captivating. We hope you’ll download it — here’s the link again — and run it in Excel. See for yourself the relative efficacy of a carbon tax trajectory that increases by a fixed amount each year, as does the Energy Innovation and Carbon Dividend Act supported by Citizens Climate Lobby, vs. one like the Climate Leadership Council’s (touted by Paulson and Bowles) that starts high but rises only by moderate, percentage-driven amounts.
As you work (play?) with the model, jot down your thoughts so you can tell us what works and what needs improving. Especially the latter, as we just wrapped the update and there are bound to be glitches. We’d love to hear from you.
A striking — and troubling — shift of late in the climate-policy landscape is the pronounced turn against carbon pricing by the environmental- and climate-justice movement — the community of individuals and organizations dedicated to overturning deeply entrenched inequities of disproportionate pollution burdens borne by African-Americans, Latinos, Asians and Pacific Islanders and Native Americans in the United States.
Most in that movement now appear to disdain carbon pricing as a climate policy tool, whether as a straight-up carbon tax or a permit-based cap-and-trade system. This shift is a blow to carbon tax prospects, not least because the broader progressive community increasingly is taking its lead from Black, Brown and Indigenous people who traditionally were excluded from leadership in environmental issues. Growing antipathy by EJ/CJ campaigners is one of the reasons that progressives’ interest in carbon pricing has cooled in recent years.
This page begins by inquiring into the sources of that antipathy. It then recapitulates two Carbon Tax Center posts from late 2020 reporting new research crediting carbon pricing for reducing disproportionate dumping of pollutants on disadvantaged communities in California. Environmental Justice, Borne Aloft by Carbon Pricing, was posted in Sept. 2020. A follow-on, Dogmatism on Carbon Pricing Mustn’t Derail Climate Progress, was published in Dec. 2020.
We then summarize another 2020 study that found that the Clean Air Act has sharply reduced environmental inequality between racial groups across the United States, even though its provisions and enforcement did not explicitly target communities of color.
While this new research is heartening, it does not yet appear to have prompted reconsideration of carbon pricing or other “universal” environmental and climate policies by environmental justice advocates.
Wellsprings of EJ antipathy to carbon pricing
A decade or so ago, at the start of of the 2010s, most EJ/CJ campaigners opposed carbon cap-and-trade programs but were agnostic about carbon taxes. By the end of that decade, most in the movement were aligning against carbon taxing as well. Some did so with increasing stridency, branding any carbon pricing as harmful, even “colonialist” (see photo).
The turn against carbon pricing by many environmental and climate advocates of color has multiple causes and antecedents, including:
- Belief that carbon pricing commodifies both nature and humans’ right to a safe environment and climate.
- Conflation of carbon pricing with predatory capitalism that, in earlier guises and their ongoing legacies, brought prosperity to whites by stealing the land of Indigenous people and the labor of people of African descent.
- Fear that carbon pricing necessarily entails “offsets” that let polluters buy their way out of reducing local pollution.
- Conviction borne from an early and easily gamed pollution-pricing program — California’s RECLAIM cap-and-trade system to cut nitrogen oxides — that carbon pricing perpetuates pollution “hot spots” in disadvantaged communities.
- A preference for addressing the climate crisis by attacking entrenched power imbalances that skew against communities of color rather than through so-called “color-blind” policies that, at least on their face, appear to ratify those imbalances.
- The mistaken belief that California’s carbon cap-and-trade program is exacerbating long-standing pollution-exposure disparities between disadvantaged communities and more affluent, whiter populations.
Further below, we unpack the sixth and final bullet — the deeply held but erroneous conviction that California’s permit-based carbon-pricing system is worsening the disproportionate pollution burden borne by low-income communities of color. It should be said, however, that it is the the cumulative power of the five other conditions that has given this misplaced conviction such great salience in the environmental justice movement — initially in California and now nationwide.
2015-2020: EJ criticism mounts against carbon pricing
We first wrote about environmental justice and carbon pricing in 2016, prompted by a column in Yale 360 by 350.org co-founder and prolific climate activist Bill McKibben. In Why We Need a Carbon Tax, And Why It Won’t Be Enough, Bill wrote:
Carbon rebates also come with one obvious moral and intellectual flaw: most of the damage from both climate change and air pollution has fallen on poor people, people of color, and Native nations, both in our country and around our world. They need to be treated fairly in any rebate plan. And any such rebates shouldn’t overlook the estimated nearly 12 million undocumented Americans who contribute to the economy — and cause far less than their proportional share of emissions. Environmental justice would mean a truly “fair” system compensated them for that history; it would also require policies to make sure that carbon pricing doesn’t perpetuate toxic “hot spots” in poor communities as companies look for least-cost ways to deal with the new reality. Furthermore, environmental justice demands that carbon prices don’t create a windfall on other of forms of ecological or toxic energy production, such as mass incineration or mega-hydro dams. (emphasis added)
Bill’s first charge to carbon-pricing proponents, that the necessarily higher prices of fossil fuels not disadvantage poor people and people of color, was one that CTC and other carbon-tax advocates had faithfully addressed for years (our Ensuring Equity page, has details). Our response to Bill, published as Carbon Tax Can Be a Remedy for Toxic Hot Spots, summarized our antidotes to economic regressivity. We then turned to hot spots.
“From time to time,” we noted, “concern is voiced that polluting companies will respond to carbon taxes by curbing carbon pollution elsewhere rather than in frontline communities like blighted urban neighborhoods, Appalachian hollows, or Native peoples’ lands.” To head off those possibilities, we urged “members of frontline communities to assume leadership positions in the carbon tax effort.”
Just how naive was our hope for partnership was made clear a year later, in November 2017, with publication by the Indigenous Environmental Network and the Climate Justice Alliance of “Carbon Pricing: A Critical Perspective for Community Resistance.” The manifesto nature of this 60-page report was telegraphed by its boldface message on page 3: “This publication will help communities and organizations articulate crucial points to resist carbon pricing and carbon change.”
The paradigm of resistance to carbon pricing suffused the report’s five “main takeaways” (see graphic at left). Carbon pricing was deemed a “false solution” that “does not keep fossil fuels in the ground.” Rather than a climate-damage antidote or preventive, carbon pricing was, at best, merely “remedial.” Better to “fight fossil fuel subsidies” and “build power,” the report stated, than succumb to polluters’ carbon-pricing “greenwash.”
Then and now, CTC has no argument with the call for frontline and disadvantaged communities to build power. But build power toward what? If ending fossil fuel subsidies is part of the solution, it needs to be said that “fossil fuel subsidies” as commonly defined — taxpayer-funded payouts or tax breaks such as the oil-depletion allowance — are dwarfed in the United States and most other industrial countries by the climate and health damages from extracting and burning fossil fuels. Which means that the real fossil fuel subsidy, as we point out on our Subsidies Reform page, is the absence of carbon pricing.
The following September (2018) saw the “Solidarity to Solutions” action in San Francisco depicted in the earlier photograph. We reached out to one of the participants, just as we had, a year earlier, to one of the prime movers of the IEN/CJA manifesto. In both cases, our entreaties for dialogue were rebuffed. Tellingly, one party informed us, “We do not have the capacity for engaging deeply with individuals that are not rooted in an organization with accountability to a base of people — there may be other organizations who have that capacity, but we do not.”
An incomplete analysis of cap-and-trade hardens EJ opposition in California
Concurrently, in California, a research project examining the incidence of pollution from California’s carbon cap-and-trade law, AB 32, was adding to environmental justice campaigners’ antipathy to carbon pricing.
That project, by a team of academics led by Prof. Lara Cushing, published its findings in a 2018 paper in the journal PLOS Medicine Carbon trading, co-pollutants, and environmental equity: Evidence from California’s cap-and-trade program (2011–2015). However, the team’s preliminary findings had begun circulating as early as 2016, helping turn opinion against the cap-and-trade program in the EJ community and its allies.
The Cushing team concluded that, following implementation of the cap-and-trade program, a majority (52 percent) of California “regulated facilities” — the state’s roughly 300 largest “stationary” sources of carbon dioxide emissions — increased rather than curbed their emissions of greenhouse gases. Moreover, the increases in carbon co-pollutants such as particular matter and nitrogen oxides were disproportionately concentrated in communities with “higher proportions of people of color and poor, less educated, and linguistically isolated residents,” according to the PLOS paper.
These conclusions left an indelible imprint on discourse about carbon pricing and environmental justice. Yet they rested on shaky ground. The Cushing analysis had no control group, leading it to mistake the cap-and-trade program as the cause of rising emissions in disadvantaged communities when emissions actually increased across all of California as economic activity rebounded from the 2008-09 recession. It also assumed that smokestack emissions deposited within a few miles, ignoring wind patterns and tall smokestacks that sometimes dispersed pollutants far from frontline communities. Last, the analysis flattened the data into binary, “up or down” results, which inadvertently suppressed the tendency of bigger polluters to cut back the most as the cap-and-trade incentives kicked in.
2020: A pair of UCSB economists improve on, and reverse, that analysis
After reading elements of the work by Cushing et al., two economists at U-C Santa Barbara — PhD candidate Danae Hernandez-Cortes and Associate Prof. Kyle C. Meng — embarked on an ambitious research methodology that would improve on the Cushing work in three respects.
First, Hernandez-Cortes and Meng established a control group of 440 lesser California emitters that were not regulated by the cap-and-trade program; this “difference-in-difference research design” weeded out macroeconomic and other factors to discern the cap-and-trade program’s specific effects on emissions from the 306 larger, “covered” facilities.
Second, Hernandez-Cortes and Meng deployed an atmospheric transport model to track where the carbon co-pollutants actually deposit after they have been emitted.
Third, rather than assigning equal weight to the 300-plus facilities, the UCSB economists based their calculations on each facility’s emission quantity.
Hernandez-Cortes and Meng wrote up their work in a paper for the National Bureau of Economic Research, Do Environmental Market Cause Environmental Injustice? Evidence from California’s Carbon Market, first posted in May 2020 and revised in Feb. 2021. We’ve summarized their key findings in the table below.
The yellow columns display ground-level concentrations of particulate and gaseous carbon co-pollutants from California’s 306 largest carbon emitters in 2008. Perhaps even more striking than the “deltas” (numerical differences) between pollution concentrations in environmental justice vs. other communities are the ratios: pollution levels in the EJ communities in 2008 were three to four times as high as in other areas.
It’s apparent from the green column that by 2012 each pollutant’s “EJ gap” — the excess pollution deposited on disadvantaged communities relative to other California locales — had worsened even from its shocking 2008 base. Thereafter, however, coinciding with the onset of the cap-and-trade program, the gap narrowed significantly, as shown in the final two columns.
Consider the Hernandez-Cortes – Meng findings in the third row of the table for PM2.5. That’s the fine particulate matter that lodges deep in the lungs and is implicated in illness and death from heart and lung diseases and strokes and is considered the most deadly air pollutant associated with industrial processes that emit climate-damaging carbon dioxide. Beginning in 2013, the EJ gap for fine particulates contracted, falling to 2.7 µg/m3 in 2017 (the last year for which pollution data was available). That was 30 percent less than the 2012 gap of 3.8, and less than the baseline figure of 3.0 µg/m3 as well.
The state’s cap-and-trade program had a similarly beneficial impact on oxides of nitrogen, or NOx, which is the key constituent (along with volatile organic compounds) of the photochemical smog that since the late 1950s has infamously blanketed skies and seared eyes and lungs across much of California, with disadvantaged communities bearing more of the impact. As shown in the table’s top row, from 2012 to 2017 the EJ gap for NOx shrank to 4.8 µg/m3, a level 21 percent below the 2012 figure. Similarly, the environmental justice gap shrank during the same five years by 24 percent for sulfur oxides and 30 percent for larger particulate matter, known as PM10.
EJ antipathy to carbon pricing strikes down the top candidate to head the EPA
Neither the Hernandez-Cortes – Meng paper, which was posted in May 2020, nor our write-up of it in September drew much commentary. Neither piece broke into the mainstream press or even climate-journalism sites such as Inside Climate News or ClimateWire. The Hernandez-Cortes – Meng paper received two mentions in the green press, in October and November (our Dec. 2020 “Dogmatism” post has details); both were cursory and largely dismissive, owing either to the writers’ inexperience or their reticence to question environmental justice dogma.
That reticence would soon prove consequential. On Dec. 2, less than a month after Joe Biden’s victory over Donald Trump, 70 environmental justice and allied groups sent a strongly worded letter to the Biden-Harris transition team opposing the prospective nomination of Mary Nichols, long-time environmental attorney and regulator and chair of the California Air Resources Board, to head the US Environmental Protection Administration.
A principal charge in the letter, and the one singled out by the New York Times and in other media accounts, was the claim, based on the Cushing analysis, that the carbon cap-and-trade program overseen and administered by Nichols and CARB “perpetrated environmental racism [by] increas[ing] pollution hotspots for communities of color in California.”
Though the claim lacked merit — Hernandez-Cortes and Meng had reached the opposite conclusion in their work, after correcting critical weak spots in the Cushing analysis — it stirred up opposition that the new administration could not attempt to counter without incurring significant political costs, as the New York Times noted in an editorial, excerpted at left, that appeared on Dec. 28 — after selection of North Carolina environmental quality secretary Michael Regan to be EPA Administrator.
(The Wall Street Journal waited an additional three months before noting in a March 24, 2021 column that “A coalition of environmental groups [had] accused [CARB head Mary Nichols] her of ‘pushing market-based approaches to the climate crisis at the expense of the health and well-being of California’s communities of color.’ But empirical evidence suggests otherwise. California’s carbon market actually narrowed disparities in exposure to particulates, nitrogen oxides and sulfur oxides, according to a study by economists Danae Hernandez-Cortes and Kyle Meng of the University of California, Santa Barbara.” Our Dec. 2020 post, Dogmatism on Carbon Pricing Mustn’t Derail Climate Progress, has a detailed discussion of how opposition to Nichols was stoked by misinterpretation of the California cap-and-trade program.)
A separate analysis finds that the Clean Air Act’s “universal” policy approach has served EJ communities well, nationwide
In Jan. 2020, Princeton Prof. Janet Currie and two other academics published a paper, What Caused Racial Disparities in Particulate Exposure to Fall? New Evidence from the Clean Air Act and Satellite-Based Measures of Air Quality.
The paper takes as its premise the statistically demonstrated (and heartening) finding, stated in the abstract, that “Racial differences in exposure to ambient air pollution have declined significantly in the United States over the past 20 years.”
Applying what it calls “newly available, spatially continuous high resolution measures of ambient particulate pollution,” the Currie paper makes three revelatory findings about declining levels of fine particulates (PM2.5) in the United States from 2000 to 2015:
- Areas with larger black populations saw greater declines in PM2.5 exposure.
- The black-white gap in mean pollution exposure to PM2.5 has decreased from 1.5µg/m3 (micrograms per cubic meter) in 2000 to only 0.5µg/m3 in 2015 — a two-thirds reduction.
- Over 60 percent of this “convergence” (reduction) in the black-white pollution gap is attributable to regulatory measures related to and required by the Clean Air Act.
The Currie paper concludes:
These findings suggest that the Clean Air Act has likely played a significant role in reducing the black-white gaps in exposure to air pollution, because the legislation systematically targeted the dirtiest areas for cleanup, and African Americans were disproportionately likely to live in areas with dirty air. Hence, although the Clean Air Act was not explicitly designed to address disparities in pollution exposure, the Clean Air Act has nonetheless contributed to reductions in environmental inequality between racial groups in the United States. (emphasis added)
What gives the bolded passage added significance is that it signifies the enduring value of the “universalist” approach to pollution reduction embodied in the Clean Air Act and other foundational environmental legislation, circa 1970. Rather than try to target or benefit one set of communities over another, the Clean Air Act would legislate, regulate and enforce policies that would mitigate environmental pollution and its effects on everyone, everywhere. And if communities of color were the furthest from those standards (which of course they were, overwhelmingly, on average), then the mandated improvements in those communities would have to be disproportionately large.
That is, although “early” environmental legislation, which was driven and to a great extent written by the environmental movement of that era (the 1970s), was not framed in terms of differential pollution impacts between rich and poor or Black and white, it nonetheless has had the effect of reducing those differentials.
The Currie paper won’t be the last word on pollution differentials. It doesn’t address the pollution gap between white or Black populations and Hispanic/Asian/Native populations. The rapidly rising Hispanic and Asian-American populations, both nationwide and in California, e.g., in the heavily polluted and largely Hispanic San Joaquin Valley, make this an urgent research priority.
Nevertheless, the Currie paper is valuable in its own right and for the light it casts on another universal policy: carbon pricing. Provided that carbon pricing programs aren’t saddled with “offsets” or other invitations to game the system, they almost certainly bend toward reducing both absolute pollution levels and race-based pollution gaps — a point argued at length in our late-2020 posts (Sept. 2020 and Dec. 2020) already discussed here.
Note: This post has been updated from its original March 1 posting: new closing section, some “line edits,” new headline.
That was quite a feel-good story in Yale Environment 360 last week. The headline, On U.S. East Coast, Has Offshore Wind’s Moment Finally Arrived?, didn’t really rate a question mark, considering how the subhead brimmed with optimism:
After years of false starts, offshore wind is poised to take off along the East Coast. Commitments by states to purchase renewable power, support from the Biden administration, and billions in new investment are all contributing to the emergence of this fledgling industry.
About time. Early this century, I was an ardent proselytizer for wind power, “the only non-polluting means of generating energy that is commercially available on a large scale,” as I described it in an Appeal to the environmental community to support the Cape Wind project in Nantucket Sound in 2002.
Sadly, in one of the worst NIMBY flameouts ever, the 470-megawatt Cape Wind project was set upon by well-connected Cape Codders like the Kennedy family and Walter Cronkite, keeping it from fruition. and creating a playbook for wind foes everywhere. Even a proposal to repurpose a mine-damaged Adirondacks mountaintop with a mere half-dozen turbines proved no match for preservationists who prioritized their views over sustainability.
But wind power’s political travails did help kindle my interest in carbon taxing. “If carbon fuels were taxed for their damage to the climate,” I mused in a 2006 article in Orion magazine, “wind power’s profit margins would widen, and surrounding communities could extract bigger tax revenues from wind farms,” helping ease the path to public acceptance and regulatory approvals. A few months after writing that, I co-founded CTC.
Wind power today
Today, though fewer than ten wind turbines operate at just two offshore U.S. sites, tens of thousands of onshore turbines together are generating 8 percent of U.S. electricity (based on preliminary 2020 data). Percentage-wise, Iowa led all states with 42 percent of its electricity production coming from wind in 2019. Texas (yes, Texas) led in absolute megawatt-hours from wind last year with a whopping 93 million megawatt-hours, nearly 28 percent of the U.S. total.
Now, the Yale story reports, “New York, New Jersey, Virginia, Massachusetts, Connecticut, Rhode Island, and Maryland have together committed, through legislation or executive action, to buying about 30,000 megawatts (MW) of offshore electricity by 2035.”
A quarter of those megawatts, 7,500, would be located off New Jersey’s Atlantic coast, a goal that NJ Gov. Phil Murphy affirmed in a statement last September announcing the state’s Offshore Wind Strategic Plan.
What physical scale do those 7,500 megawatts constitute? Let’s use as our metric the new crop of super-giant turbines. According to the Yale story, Vestas, Orsted and General Electric are today selling wind machines in the 12-14 megawatt range — an impressive notion, considering that not long ago the 3.6-megawatt Cape Wind turbines were said to be pushing the envelope.
Let’s stipulate 12.5 megawatts, since 80 of them conveniently multiply to 1,000 MW. Meeting NJ Gov. Murphy’s 7,500 MW target would then entail erecting 600 of these super-giants off the state’s roughly 115-mile-long Atlantic coast.
If 600 huge windmills seem daunting, try multiplying the number by five. Yes, 3,000 mammoth turbines providing 37,000 MW from offshore wind is what could be required if New Jersey goes all-in for decarbonization over the next several decades, according to one energy vision that is a kind of apotheosis of the Green New Deal.
The idea of 100% Wind-Water-Sunlight
That vision is the all-renewables 100% wind-water-sunlight (“100% WWS”) conception propounded by Stanford physicist-engineer Mark Jacobson and colleagues, under the aegis of an NGO known as the Solutions Project.
The idea is for electricity to power all energy uses — not just lights and appliances and electronics but also cars, trucks, heat and industry. Even, eventually, aircraft, either through batteries or, more likely, hydrogen fuel manufactured by electrolyzing water. Electricity is both an efficient energy form for delivering “energy services” and the easiest to provide from all-zero-carbon sources: wind turbines, solar panels and other sunlight-based generation, and water power from rivers or tides.
The Jacobson et al. vision has been written about widely (here’s Jacobson’s 2014 TED talk; also see link to pdf paper at the end of this paragraph) and need not be rehashed here. We use it here as a benchmark. References are to the detailed 2015 paper by Mark Z. Jacobson et al., “100% clean and renewable wind, water, and sunlight (WWS) all-sector energy roadmaps for the 50 United States,” Energy Environ. Sci., 2015, 8, 2093 (14 MB pdf).
By The Numbers: New Jersey Offshore Wind in an All-Renewables Scenario (without a Carbon Tax)
- 32,900 MW — New Jersey’s total 2050 “end-use energy load” under 100% WWS, expressed as megawatts operating continuously all year. From Table 1 of the Jacobson paper.
- 288,204,000 MWh — New Jersey’s total 2050 “end-use energy load” under 100% WWS, in megawatt-hours. Calculated by multiplying the preceding MW figure by the number of hours in a year (8,760).
- 55.5% — Share of New Jersey’s electricity to be provided by offshore wind, from Jacobson’s Table 3. Another 10% is assumed to come from onshore wind, for a total NJ wind percentage of 65.5%, which is consistent with Jacobson’s U.S. total of 50% (31% onshore, 19% offshore), considering the state’s small land area relative to its coastline. (Another 27.25% of the needed electricity in the 100%WWS scenario would be generated by utility-owned-and-managed photovoltaic arrays, with another roughly 3% each from PV installations on residential and commercial buildings.)
- 160,000,000 MWh — New Jersey’s 2050 electricity to be provided by offshore wind. Calculated by multiplying the #2 and #3 figures above.
- 50% — assumed capacity factor of the offshore wind turbines. That’s more than the 42.5% in the Jacobsen paper (Table 2, FN), but less than the 60-64% that General Electric optimistically touts for its 12-14 MW turbines.
- 54,750 MWh — annual electricity from each 12.5-MW offshore turbine. Calculated by multiplying 12.5 MW figure by the number of hours in a year.
- The result: 3,000 offshore wind turbines — calculated by dividing the #4 figure by the #6 figure. (The calculation yields 2,920, which we round to 3,000.)
Can this be done? Can New Jersey install (or, more precisely, organize and govern the installation of) 3,000 giant offshore wind turbines?
A robust carbon tax would let NJ dispense with 35-40% of the offshore turbines
When we posted this blog on March 1, we promised to estimate how much a robust carbon tax could trim the need for New Jersey offshore wind by trimming energy demand.
We’ve now (March 12) done the calculation: it appears that a carbon tax starting at $15 per ton of CO2 and incrementing annually (and indefinitely) by that amount would achieve roughly five-eighths (63%) of its carbon reductions through fuel-switching, i.e., by swapping out fossil fuels in favor of renewables — wind turbines, solar panels, etc. The other three-eighths (37%) of the carbon reductions would come from reducing energy demand as a result of energy being made more expensive relative to other goods and services.
The latter figure — the 35 to 40 percent reduction — means that New Jerseyans could achieve 100% wind-water-sunlight energy provision with 35-40 percent cuts across the board in the amounts of wind, solar and water power that the Jacobson scenario would otherwise entail. The requirement to build 3,000 giant offshore wind turbines would become “just” 1,800 to 1,900.
April 10 postscript: What do we mean by “monster” wind turbines?
Friend of CTC Peter Jacobsen (no relation to Mark Jacobson; different spelling, in fact) tipped us off yesterday to the size matchup between what the New York Times recently called GE’s new “monster” wind turbines and the smokestacks of what was the largest U.S. coal-fired power plant until its closure in 2019 and demolition last year, the Navajo Generating Station in northern Arizona, near Lake Powell.
Some folks view giant smokestacks and giant turbines as pretty much the same. Two decades ago, a newspaper story about a proposed wind farm outside Cooperstown, NY, near the Finger Lakes, closed with a quote from a Manhattan television executive who was retiring to a hilltop home in the area: “I think the towers would make my property worthless,” he said. “To see these giant towers near your house — it would be like driving through oil derricks to get to your front door.”
A few years later, I toured a nearby wind farm while researching an essay on wind power for Orion magazine. “To my eye,” I wrote, “the wind turbines were anti-derricks, oil rigs running in reverse. The windmills I saw in upstate New York signified, for me, not just displacement of destructive fossil fuels, but acceptance of the conditions of inhabiting the Earth.”
To perform calculation: Download CTC’s carbon-tax spreadsheet model (xls). Stay within the first “tab,” Inputs-Summary. In Col. I, make sure Rows 19, 22 and 27 are set to $15.00 and Row 21 is set to Linear. The 37% result may be found in Cell G224. We hope to update the model’s 2017 parameters to 2019 (pre-pandemic) levels by the end of May.
Protecting “a desert in the mountains”
Though I’ve hiked all over the west, I’ve never been to Nevada’s northwest corner. On the map it’s a broad, empty strip from I-80 to the Oregon line. For hundreds of miles, it is in fact wild country — and far from empty, biologically, ecologically.
In January, a pair of activists, Will Falk and Max Wilbert, pitched a tent in one of the loveliest valleys of the region, seeking to rally resistance to a proposed lithium mine on public land. The place where they’ve established their protest camp is called Thacker Pass.
Lithium is a metal, and its physical and chemical properties make it versatile enough to be baked into lubricants, ceramics and other useful stuff, including batteries. Lithium-ion batteries, invented in the late 1970s and prized for their energy density and rechargeability, are integral to two pillars of the Green New Deal: electric vehicles and power storage.
Falk and Wilbert, camped out in midwinter cold, enduring what is no doubt some small privation, are asking that we recognize the ecological and environmental cost of the so-called sustainable economy, at the center of which is the mining of lithium. We need to understand why they are taking a stand at Thacker Pass.
Here’s how they describe where they are right now:
Thacker Pass is a physical feature in Humboldt County, Nevada, part of the McDermott Caldera approximately 60 miles northwest of Winnemucca. It was formed 16 or more million years ago, is traditional and unceded territory of the Paiute Nation, and is United States Bureau of Land Management public land.
Now it is also the proposed site for a massive lithium mine that would destroy the area and valuable habitat for the creatures who live there.
A Less Than Green New Deal?
Climate campaigners have decreed that the world’s cars and trucks must switch to electricity — an imperative that was boosted by General Motors’ recent announcement that it intends to sell only electrics after 2035. Climate hawks say biodiesel can’t be done at scale and hydrogen vehicles are years from commercial use, and they’re right, not when American households and businesses own 275 million cars and trucks and drive them over 3 trillion miles each year — making “ground transportation” the country’s biggest source of planet-heating carbon dioxide emissions.
Key to the green idea for transportation is to make wind and solar power so plentiful that the electric grid will no longer need generators running on fossil fuels. Electric vehicle battery re-charging — and driving — will then be emission-free and climate-pure.
Of course, a renewables-based grid is subject to fluctuating output from the wind farms and solar arrays. That’s where lithium’s other GND connection comes in: powering massive rechargeable battery stacks that can feed electricity into the grid for hours at a time, continuously stabilizing electricity supply.
Already, giant assemblages of lithium-ion batteries are sprouting up in California, where renewable energy has penetrated furthest, enabling utilities in the state to close some turbines burning fracked methane.
The Green New Deal, the anointed framework for perpetuating industrial civilization as we know it while creating jobs and a “just transition” from the fossil-fuel economy, is clearly better than our carbon-based catastrophic course. It also depends on massive amounts of lithium.
I figure that electrifying all U.S. cars and trucks in two decades, as envisioned in GND scenarios, will demand the continuous lithium output of three to five Thacker Pass mines. (See sidebar.)
Powering “utility-side” grid-smoothing batteries will require still more. How much, I do not know. An extensive literature search turned up not a single statement of the quantity of lithium needed per gigawatt-hour, say, of electricity storage — an indication, perhaps, of the alienation of Green New Dealers and energy scenario-spinners alike from the physical implications of their intentions.
Lithium = Devastation
One reason for Falk and Wilbert’s stand is obvious: the lithium mine at Thacker Pass will destroy an entire sagebrush ecosystem. Mind you, what’s planned at Thacker Pass isn’t just an epic-sized mine. There will also be an enormous complex to extract lithium from the mined ore for its conversion into a non-volatile carbonate form to be made into batteries.
Because lithium’s concentration in ore at Thacker Pass runs as low as two-tenths of one percent, producing one ton of the stuff for use by society entails strip mining and processing as much as 500 tons of earth. Over a single year, producing 60,000 tons of lithium at the site could mean digging up as much as 20 to 30 million tons of earth, more than the annual amount of earth dug up to produce all coal output of all but seven or eight U.S. states.
Removing the lithium from the ore is done with the industrial economy’s dissolver of choice, the notoriously corrosive and toxic sulfuric acid. The developer, Canada-based, China-backed Lithium Americas Corp., plans to acidify molten sulfur on site, trucking in the stuff from oil refineries. Hauling the material will require 75 tractor-trailer loads a day, according to Falk and Wilbert — every one of them running on fossil fuels.
Unsurprisingly, the processing equipment is budgeted at a dozen times more than the mine itself, in Lithium Americas’ “pre-feasibility study” (pdf, p. 228 of 266), with the whole enterprise topping out at more than a billion dollars. You don’t spend that much money on apparatus to move, crush, leach and acidify earth without scarring and contaminating large swaths of it.
Thus, the “Protect Thacker Pass” banner. There’s a lot to protect. On the encampment’s web site, Falk and Wilbert describe Thacker Pass as “a stunningly biodiverse, wild, expansive, and beautiful desert in the mountains.” In mid-winter, they attest that the land practically vibrates with stars and stillness.
The pair’s real aim at Thacker Pass is to question a Green New Deal that is dependent on large-scale resource extraction and industrial manufacture. Which means questioning not just society’s but the environmental movement’s acquiescence to consumerism and material growth.
Where is it written, they ask, that Americans must own 275 million vehicles? Where is it written that we can’t halve that number, to Western European levels, with denser suburbs and Euro-quality transit along with broad cultural changes substituting place and proximity for pointless travel, thus slashing the “need” to replace all those cars and trucks with electric vehicles built from mined lithium? As for grid storage, rate incentives that harmonize electricity usage with its real-time availability could partially supplant batteries. Smaller homes and less air-conditioning of buildings could also trim power demand, period.
Tightening the Regulatory Screws Would Help
Would it also make a difference if the pollution discharges permitted at Thacker Pass and at other lithium mines were cut ten-fold? I believe so. This wouldn’t just reduce ecological degradation in the immediate areas. The cost to comply with those regs would boost the price of lithium carbonate. The responses to the higher price — ranging from lighter vehicles that can get by with smaller battery packs to potentially more-efficient (hence, less-resource-intensive) energy storage media — would cut demand.
The U.S. has already witnessed just such a chain of events: with coal-fired power plants. To satisfy regulatory mandates to cut new plants’ soot emissions and acid gases roughly ten-fold, utilities were forced in the 1970s and 1980s to spend billions for scrubbers, precipitators and the like, driving up prices of new coal-fired plants — a progression I documented at the time. Coupled with even more meteoric cost escalation at nuclear power plants, the result was spiraling electric rates that helped spark the revolution in energy efficiency that has all but extinguished growth in electricity demand in the United States.
There, in a nutshell, is the logic behind carbon taxing: to raise prices of fossil fuels in accordance with their true costs, thus spurring reductions in their use. Lithium, no less than coal, oil and methane, should be forced to adhere to the same dynamic. If electric vehicles and carbon-free grids are rendered more expensive for awhile, so be it.
Industrial civilization is still destroying ecosystems, laying waste to biodiversity, ramping up its plunder of forests, consuming more metals than ever, depleting ocean life at ever-increasing rates…and on and on… One antidote is for prices to speak the truth about underlying costs.
Nevertheless, even my regulatory-based scenario has a weak link: global commerce. Make it cost more to mine lithium in the USA, and global capital will alight elsewhere. Lithium Americas already operates a mine in Argentina, and the mineral is widely distributed around the world.
To evade the Whac-a-mole trap, the fight that Falk and Wilbert are mounting in Nevada has to be waged as well in Argentina, Australia and especially Chile, the world’s biggest current provider. It’s a tall order.
First, though, they have to stop the mine where they’re camped, at Thacker Pass. That’s a tall order too. That lithium is a midwife to a low-carbon economy makes it less ugly than coal and less evil than oil. But all the same, it’s a force that is industrializing the entire planet, to Earth’s and our detriment and, possibly, demise.
A True Sagebrush Rebellion
Reporting in 2015 on deadbeat cattle rancher Cliven Bundy’s armed standoff over federal grazing fees, journalist Christopher Ketcham wrote in Harper’s that the so-called Sagebrush Rebellion — the Western resistance to federal authority over public lands and water — has always been centered in Nevada. That rebellion proffered the noxious idea that public lands should be maximally exploited for private gain.
The rebellion of Falk and Wilbert, situated in the same sagebrush wilderness, seeks the opposite: “A world in which we prioritize the health of future generations. A world in which we live in harmony with the natural world, rather than relying on extraction. A world in which blowing up a mountain for lithium is just as unacceptable as blowing up a mountain for coal.”
For information on donating, supporting, communicating or coming to Thacker Pass and joining the lithium mine blockade, click here.
Feb. 8 addendum: My post today for Streetsblog NYC, Beware the EV Congestion Boomerang, explains how exempting electric vehicles from New York City’s congestion pricing program will lead to increases in air and climate pollution.
Note: A new (March 2021) CTC page, Carbon Pricing and Environmental Justice, summarizes this post and its Sept. 2020 predecessor, Environmental Justice, Borne Aloft by Carbon Pricing, and embeds them in a larger narrative about the environmental justice movement’s increasing turn against carbon pricing.
Mary Nichols’ candidacy to lead the US Environmental Protection Agency is over. Not so, the need to grapple with the profound mistrust of carbon pricing felt by many advocates for environmental justice.
Nichols, long-time California clean-air chief, was considered “a lock” to head the EPA, according to the New York Times, until 70 environmental justice and allied groups sent a strongly worded letter, excerpted at left, to the Biden-Harris transition team opposing her nomination. The new administration’s selection of North Carolina environmental quality secretary Michael Regan for the position was announced last week.
Signatories (download the letter here, pdf) included national organizations Friends of the Earth, Greenpeace, Food & Water Watch and Oil Change International, along with dozens of California groups and the umbrella California Environmental Justice Alliance.
A principal charge in the letter, and the one singled out by the Times and in other media accounts, was a claim that the carbon cap-and-trade program overseen by Nichols and the California Air Resources Board “perpetrates environmental racism [by] increas[ing] pollution hotspots for communities of color in California.”
That charge may be seen as a culmination of the deep suspicion with which many environmental justice advocates regard pollution taxes or cap-and-trade schemes (the two are often termed “market measures”) intended to cut carbon emissions.
I did my own grappling with this matter in a lengthy post here in September. I noted inter alia that “many activists recoil from carbon pricing’s implicit acquiescence to capitalist means of exchange that [appear to] commodify pollution” — language similar to the EJ letter’s charge that “market mechanisms … commodify the source of the climate crisis.”
Ironically, those who, like me, train an economic lens on the climate crisis regard the failure to price carbon emissions as a source of the climate crisis. And not just economists but the entire environmental community is united in demanding elimination of fossil fuel subsidies. Yet the ability to dump carbon pollution into the atmosphere for free is the biggest subsidy of all, and carbon taxes (or “charges”) uniquely diminish that subsidy.
Nevertheless, the sharper irony, addressed here, is that the cap-and-trade program that is being vilified for perpetrating environmental inequities appears in practice to be diminishing them.
Environmental Inequity and Pollution Hotspots
As recently as a decade ago, ground-level concentrations of deadly carbon “co-pollutants” — toxic particles and gaseous oxides — issued from industrial smokestacks in California were three to four times higher in disadvantaged communities than in more affluent and predominantly white locales. That result was derived in an analysis published earlier this year by two U-C Santa Barbara economists, ratifying what environmental justice campaigners from these communities have always understood.
Compounding this long-standing health assault, an early cap-and-trade program meant to curb smog in California (called Reclaim) was riven with escape clauses that, it is said, emboldened increases in pollution dumping onto minority communities from an enormous oil refinery — the state’s second largest — in Richmond, near San Francisco. The conviction was soon born that pricing of pollution, whether auctioned to polluters as tradeable emission permits (cap-and-trade) or charged directly (via pollution taxes), could never mitigate pollution inequities afflicting historically-burdened communities of color.
This belief grew and intensified across California, fueled by intersecting political and social currents and by research suggesting that a newer, more ambitious and less porous statewide carbon cap-and-trade program legislated in 2006 and put in place in 2013 by the California Air Resources Board was likewise concentrating emissions in minority communities. (A 2019 paper, California Climate Policies Serving Climate Justice, by Univ. of San Francisco Law Professor Alice Kaswan, is a useful guide to the state’s many laws addressing carbon emissions and environmental injustice.)
Must carbon pricing worsen hotspots?
The specter of “hotspots” is paramount in the Dec. 2 EJ letter and prominent in environmental justice expressions on pollution pricing. Yet the idea that polluters respond to charging for pollution by perpetuating or, worse, exacerbating toxic emissions in poor communities runs counter to almost everything we know (or believe we know) about how polluting enterprises actually operate.
A carbon tax, by its nature, exacts a cost for every missed opportunity to reduce carbon emissions. Carbon pricing makes every means — and there are literally billions at hand — of reducing carbon emissions more profitable, which is why devotees of carbon taxes find them so enticing.
The price incentive, we believe, gives individuals and especially companies new cost-effective means to pare their use of carbon fuels. (The same is true for carbon cap-and-trade programs, although there the cost is paid, somewhat indirectly, via the polluting company’s purchase of emission permits, and the price signal is found in the carbon-permit market.) Accordingly, a company that deliberately perpetuated toxic hot spots in disadvantaged communities would weaken its bottom line.
Consider an oil company that operates 10 refineries — 5 in minority communities, 5 in white locales. Under a carbon price, every new piece of equipment or procedure that reduces carbon emissions at any of the 10 reduces the company’s carbon tax tab (or its cap-and-trade expenses).
All 10 refineries will almost certainly undergo some change to lower their emissions. Logistical considerations or racial favoritism might conceivably lead the company to concentrate more of its reduction effort at its 5 white sites. But it strains credulity to posit that the minority sites will take on more emissions on account of the carbon price.
The reason? Carbon pricing is a unitary policy that applies equally to all emissions. Charging for emissions creates opportunities to cut emissions everywhere, simultaneously. The choice presented to headquarters isn’t to pit potential reductions from Refineries 1-5 against reductions from Refineries 6-10, but to max out on the new cost-cutting opportunities that the carbon price presents at Refineries 1 through 10 .
This schematic suggests that even community-neutral pricing policies — ones that lower total emissions without regard to where — will benefit disadvantaged communities in health terms. That is true even if the relative bias of disproportionate burdens on those communities isn’t specifically targeted, whether in the pricing design or in the use of the carbon-pricing revenues.
Keep in mind that the refineries or other large emitters that are most cost-effective to upgrade or downsize because of the carbon price will be those with the oldest, most-polluting equipment. To the extent that these are in poorer communities — a syndrome that the environmental justice movement has documented for decades — the emission reductions will be concentrated there as well.
There is also the mathematical fact that equal percentage reductions across the board will bring the greatest absolute emission reductions where the baseline emissions are highest. If polluters are spewing 200 tons of pollution on your community but only 100 tons on mine, a 25% reduction everywhere will cut emissions in your back yard by 50 tons, vs. 25 tons in mine.
For the inequitable historic differential in pollution exposures to widen, there would have to be grossly lesser emission percentage reductions in minority areas. In the example above, the decrease in emissions in those areas would have to be held to just 25% while emissions elsewhere fell 50% or more.
A few such examples can probably be found in California, among the 300-plus emitters large enough to be covered by the state’s carbon cap-and-trade program. But so long as the overall cap is tightened each year while “offsets” and other loopholes are kept to a minimum, any increases will be far outweighed by reductions in other low-income communities of color.
A Startling Finding about California’s Carbon Cap-and-Trade Program
In early August, I learned of a new academic paper that, in its elegance and reach, appeared capable of singlehandedly untethering carbon pricing from the charge of environmental injustice. The paper is the one mentioned up front that found that just a decade ago, as a baseline, California’s disadvantaged communities suffered from far larger concentrations of carbon “co-pollutants” from industrial smokestacks, compared to whiter and more prosperous locales.
The person who collegially notified me of the paper was Lara Cushing, an epidemiologist (MA) and energy policy specialist (PhD). It was Prof. Cushing’s team whose research was cited in the letter to the Biden-Harris team charging that California’s carbon cap-and-trade program “perpetrates environmental racism.”
During the rest of August and most of September I pored over the academic paper, which was titled, “Do Environmental Markets Cause Environmental Injustice? Evidence from California’s Carbon Market.” I corresponded with its authors, members of U-C Santa Barbara’s economics department: PhD candidate Danae Hernandez-Cortes and Associate Prof. Kyle C. Meng. Their paper was complex and bursting with implications, and I wanted to be certain I understood it fully before writing it up. I circulated a draft story to a few environment-oriented outlets for publication or a news exclusive, eventually posting it myself to the Carbon Tax Center website on Sept. 28 as Environmental Justice, Borne Aloft by Carbon Pricing.
Hernandez-Cortes and Meng’s key finding, I explained, was this: From 2012 to 2017, the pollution disparity between disadvantaged and other communities in California fell an estimated 30 percent for particulates, 21 percent for nitrogen oxides and 24 percent for sulfur oxides. Moreover, the 21-30 percent drops in the state’s “EJ gap,” as they termed the disparity, was not merely concurrent with the cap-and-trade program, which CARB put into effect in 2013; it was “due to the policy” itself, according to the authors.
This finding differed diametrically from the conclusions of Prof. Cushing and her colleagues, and I was obliged to explain why. The account from my post is shown in the sidebar and summarized below:
- To weed out macroeconomic and other extraneous factors and discern the cap-and-trade program’s specific effects on its “covered” facilities, Hernandez-Cortes and Meng included a comparison group of unregulated California emitters.
- Hernandez-Cortes and Meng traced the atmospheric paths taken by the pollutants once they left the smokestacks, via modeling, rather than assuming they landed in narrow bands nearby.
- Hernandez-Cortes and Meng based their before-and-after calculations on each facility’s actual emissions — a richer and more accurate approach than the earlier work’s up-or-down formulation.
Reactions to the Hernandez-Cortes – Meng Findings
My post highlighting the Hernandez-Cortes – Meng findings drew little comment (none from the environmental justice campaigners to whom I reached out) and very little press. The paper’s two mentions in the green press — in an October article in Grist, Cap and Trade-Offs, and in a November story in Yes! magazine, Can California’s Cap and Trade Actually Address Environmental Justice? — were cursory and largely dismissive.
For example, the Yes! article said that the 20% to 30% narrowing of the EJ gap applied only “in the areas where facilities were covered by the program,” whereas Hernandez-Cortes and Meng actually calculated the reductions across all of California’s 1,712 populated zip codes. The Grist story obfuscated Hernandez-Cortes and Meng’s statistically significant modeling of smokestack dispersions as reflecting only “a spread of outcomes of various likelihoods” — whatever that means.
One could almost intuit a wish to cling to the Cushing team’s negative conclusion about cap-and-trade’s outcomes, and thus to downplay Hernandez-Cortes and Meng’s ingenious analysis that had apparently upended it.
Finally, in late November, a substantive critique of the Hernandez-Cortes – Meng analysis appeared. It was posted by Danny Cullenward, a lecturer and affiliate fellow at Stanford Law School, and Katie Valenzuela, who formerly was policy and political director for the California Environmental Justice Alliance and co-chair of California’s AB 32 Environmental Justice Advisory Committee (AB 32 is the state’s 2006 umbrella climate law).
Yet the Cullenward-Valenzuela criticisms of Hernandez-Cortes – Meng appear to point to imperfections, not fatal flaws.
To wit: Hernandez-Cortes and Meng employed zip codes and not finer-grained census codes to compare EJ neighborhoods with other locales. Hernandez-Cortes – Meng drew smokestack data from the state’s 35 different regional air districts that, they say, “use 35 different methods for data collection.” Hernandez-Cortes and Meng didn’t adjust for possible confounding effects from California’s Low Carbon Fuel Standard, a companion climate measure that took effect during the period covered in their cap-and-trade analysis.
Notably, however, neither Cullenward-Valenzuela nor anyone else writing from an environmental justice perspective criticized the Cushing team’s analysis — the one bolstering the belief that the cap-and-trade program has deepened environmental inequities — for these same failings, let alone its more consequential shortcomings I enumerated in the preceding section. Nor did Cullenward and Valenzuela attempt to quantify how much, if at all, remedying the asserted shortcomings in the Hernandez-Cortes and Meng paper would weaken their findings.
Perhaps the weightiest criticism of Hernandez-Cortes – Meng from Cullenward and Valenzuela is their last, under the heading, “The question is not cap-and-trade versus nothing”:
If California had chosen a path of more prescriptive, direct emissions reductions … we would likely be seeing far more emissions reductions … and far more improvements for environmental justice communities than we’re seeing under the cap-and-trade program today. To say [the cap-and-trade program is] better than nothing ignores the fact that adopting a weak cap-and-trade program has led to prolonged and higher emissions in environmental justice communities than if California had adopted a stringent carbon pricing policy or relied instead on non-market mechanisms that would have been targeted at the pollution reductions our communities need.
That claim may well be true. It certainly resonates with me, an advocate since the late 1980s of straight-up carbon taxing rather than oblique and often loophole-plagued cap-and-trade approaches. But that’s not the question that Hernandez-Cortes and Meng tackled in their study, which was: On a statewide basis, has California’s cap-and-trade program widened or narrowed environmental inequities?
Though California EJ advocates insist that the cap-and-trade program has widened environmental inequities, no one has effectively rebutted the evidence marshaled by Hernandez-Cortes and Meng that it has actually narrowed them.
Possible Trouble Ahead
The scant attention accorded the Hernandez-Cortes – Meng paper has largely sidelined its meticulous and virtuosic treatment of the impact of California’s cap-and-trade program on environmental inequities. A result has been to let stand the accusation that the program’s sponsoring agency, the California Air Resources Board, has “perpetrated environmental racism.”
My concern here is not that that charge helped block CARB’s Mary Nichols from heading EPA, but with the possibility that its uncritical acceptance may impact national environmental and climate policies going forward.
The idea that carbon pricing cannot serve environmental justice may have been justified by systemic oppression, and it dovetails nicely with certain critiques of capitalism as being a willing handmaiden of inequity. But in its largest empirical test to date in the United States, that proposition has been shown highly questionable. Now, judging by its impact on Nichols, it threatens to block carbon pricing measures from consideration by the incoming Biden administration.
Getting meaningful climate legislation through a divided Congress will be difficult under any circumstances. The temptation will now be strong to jettison measures that might be opposed by advocates for racial justice and others on the left. Another New York Times story this month, this one showcasing president-elect Biden’s choices of Janet Yellen and Brian Deese for Treasury secretary and National Economic Council director, noted that carbon pricing “is fiercely opposed by both conservatives and some liberal groups.”
Carbon pricing, whether rendered through tradeable emission permits or straight up via carbon taxes, faces hurdles galore. Saddling it with unfounded criticisms, notwithstanding their deep wellsprings, appears more likely to compound environmental injustice rather than help overcome it.